Surgent's Successfully Completing an Income Tax Return for a Trust or Estate : Form 1041

Overview

Some of your clients have estate plans that provide for testamentary trusts. Other clients make gifts to irrevocable trusts during their lifetime. And some will die with probate estates. Therefore, you should have a basic understanding of how the income tax applies uniquely to trusts & estates. For example, "distributable net income" (DNI) is a trust-only concept that is essential to understand. Plus, the deductions for fiduciary fees, charitable deductions & certain miscellaneous deductions (such as investment advisory fees & attorney/accountant fees) are treated differently than for individual taxpayers. However, with a decent understanding of the basic income tax & net investment income tax (NIIT) rules, you can add significant value to your clients.